What is the difference between a Grantor Trust and a Revocable Trust?
by Ken Golliher, BOL Guru BIO AND CONTACT INFO QUESTION: What is the difference between a Grantor Trust and a Revocable Trust? How is a revocable trust documented? ANSWER: Both the IRS and the FDIC use the term “revocable trust” in reference to a bank account which is not supported by a written agreement, but has POD provisions under state law. This revocable trust does not require documentation, only titling in accordance with state law. On the other hand, a grantor trust is always supported by a written agreement. However, in a more sophisticated context, a Grantor trust may also describe itself as revocable. The adjective just describes one feature of the trust. IRS regulations describe grantor trusts by listing a number of features a written trust agreement might contain. In essence, they look to how much control the people setting up the trust retained in the agreement. If they can do things like revoke it or change beneficiaries, it is a “grantor” trust. In effect, the assets in
